Against a basket of currencies the dollar index is down 5% in September (Click here to track the dollar index).

Yes - on fear that further Quantitative Easing (QE) from the Fed will debase the value of the greenback.

But it's also a symptom of the market switching to a 'risk-on' mode. For September the S&P 500is still up over 8% here at home - and we keep hearing how Americans are investing in Emerging Markets - selling dollars in the process.

The big gainer against the dollar is the Euro - up 7% in September- the market appearing to shrug-off even the Irish governments struggle to re-capitalize Anglo Irish bank (tomorrow Dublin likely to announce a fresh taxpayer injection for AIB, it can ill afford). Many in the market believe that the Euro is simply benefiting from central banks in Asia and Latin America (China, Thailand & South Korea - even Columbia) diversifying their proceeds from waves of Foreign Exchange intervention - when each sells its own currency into the market to weaken it.

Ultimately the stronger Euro is bad news for struggling nations on the periphery of Europe. Infact it's a double whammy: their own are industries locked-in against an ever-more competitive Germans - in a currency block that continues to appreciate.

Conversely, in the present circumstances, analysts tell me the weaker dollar is probably 'good' for most Americans.

We are battling the power of two nightmares: double dip and deflation.

A weaker dollar increases American competitiveness and should boost exporters. The fact that it makes imports more expensive - 'imports inflation' - will also be welcomed by some, in the short term at least.

In short, the more the dollar falls, the less need there is for the Fed to actually embark on Quantitative Easing aimed at creating demand and moderate inflationary pressure. Don't forget, when the Brazilian Finance Minister talks about an 'international currency war'- Guido Mantega means a war in which each nation seeks to 'weaken' its own currency in order to grab jobs and growth from the next.

And - through September at least - this a war that America is winning.